7 Exemptions Non-PTELL Districts PTELL DistrictsLoss of local property tax revenue at the district tax rateA gain in General State Aid 2 – 3 years down the road at the formula ratePTELL DistrictsNo local loss if tax rate below maximumEstimated that GSA would be minimally impactedNote: The 7% cap in Cook County has a different effect on GSA

8 PTELL Property Tax Extension Limitation LawReferred to as “Tax Caps”Limits the Amount the Extension can Increase over the Previous YearLinked to the Consumer Price Index (CPI)Legislated for Collar Counties(1991) Cook County (1994)Limiting Rate X Total EAV = ExtensionMaximum that a district can receive (no bonds)

9 Comparison Non-PTELL PTELLOperating Tax Rate X Total EAV = Money to DistrictOperating Tax Rate is Fixed, EAV Varies so Money to District AdjustsPTELLLimiting Rate X Total EAV = Money to DistrictMoney to District is Fixed (increase limited to CPI)EAV Varies so the Limiting Rate AdjustsIn Both Cases We are Talking About the Maximum

14 State FundingGeneral State Aid – provide unrestricted grants-in-aid to Illinois school districts in an equitable manner. Foundation level formula and poverty grant formula.The objective of categorical programs is to reimburse districts for the expense associated with providing services to or for targeted populations.

20 Effect of EAV Increase to GSAFor every $1 Million increase to the EAV used to calculate GSA for a foundation district:Unit Districts Lose $30,000 in GSAElementary Districts Lose $23,000 in GSAHigh School Districts Lose $10,500 in GSAThey may have gained in local property taxes if their local rate is higher than the formula rateThe EAV is not used for GSA until 2 years after the tax extension (2006 EAV used in 2007 tax extension is used for FY 2009 GSA)

37 Statutory Requirements for EFABEFAB shall make recommendations … for the foundation level …and for the supplemental general state aid grant level … for districts with high concentrations of children from poverty.The recommended foundation level shall be based on a methodology which incorporates the basic education expenditures of low-spending schools exhibiting high academic performance.

38 EFAB Reports Initial report in January 2001 (FY02)$135 increase to FLEVEL, utilize max of 3-yr avg or prior year ADA, lower poverty threshold to 15%, continuing appropriationInterim report in January 2002 (FY03)$120 increase to FLEVEL, new poverty count and formula, continuing appropriationComprehensive report in October 2002 (FY04)$1,105 increase to FLEVEL, new poverty count and formula, reinstate continuing appropriation. (Property tax abatement and income tax increase to fund formula changes)Report of May 2005$1,441 increase to FLEVEL, apply the Employment Cost Index (ECI) to the Poverty Grant Formula, reinstate the Continuing AppropriationNo Report in January 2007

39 Adequacy Models Economic Cost Function Successful School DistrictAttempts to determine the amount needed per pupil for the desired level of performanceMultiple Regression ModelComplicated Statistical ModelNo state was using this model (2006 research)Successful School DistrictIdentifies school districts at the desired performance levelCalculates a weighted average from the expenditure levelOutliers are eliminated so data could be skewedProfessional ConsensusA group of educational professionals identify the components of a prototype schoolOnce the components are identified they are then “costed out”Can lead to a “maximum” rather than “adequate” levelCombination of MethodsUses the best of the 3 modelsSchool level not district

40 EFAB MethodologyContracted with Augenblick & Meyer for a replicable methodology to produce an adequate funding level.Based on the Successful School District ModelFirst used in the October 2002 reportRequested foundation level was $5,665Criteria Used:Two Most Current Years of Test DataLow-Income PercentageMinimum % Meeting Standards – 67%Use the Per Capita Tuition chargeMcMahon Index used as Cost AdjustmentUpdated for the May 2005 Report - $6,405

45 Committee of Eight Two legislators from each chamberLate Fall & Early Winter of 1997Tons of simulations with estimated dataPassed HB 452 – Effective FY 1999Contained in spirit the GSA recommendations of the Edgar CommissionContinuing appropriations for GSA & HH